Jupiter, NetRatings Patent Lawsuit Revived, for Now

Online research firm Jupiter Media Metrix is hedging its bets in its proposed merger with rival NetRatings Inc. and has reinstated its patent lawsuit against NetRatings.

The two companies said Jan. 18 that they modified terms of their merger agreement to comply with a Federal Trade Commission request for additional information. They also noted that the patent lawsuit, scheduled to be heard in August, was reinstated.

"In light of the time required to comply with the second request [from the FTC] and so NetRatings and Jupiter Media Metrix can preserve their respective positions in patent litigation, the two companies have agreed to permit the patent litigation between them, which had been put on hold as part of their merger agreement dated October 25, 2001, to proceed," the companies said in a joint statement.

The companies received the request Dec. 7 from the FTC for further information pertaining to their pending merger. As a result, the companies expect the merger to close near the end of the first quarter instead of earlier in the quarter, which they originally had expected.

Susan Hickey, a spokeswoman for Jupiter Media Metrix, said that reinstating the lawsuit is a way for the company to protect itself if the merger is not completed successfully.

"As part of the merger agreement, the two companies agreed to put the patent litigation 'on hold,'" she said. "On Jan. 18 we announced that while we intend to continue our work to close the merger, we were also restarting the patent litigation to protect our position should we need to litigate in August. When the merger is completed, of course, we will terminate the litigation."

NetRatings said in October it would acquire ratings rival Jupiter Media Metrix for about $71.2 million. The agreement requires that 30 percent to 50 percent of the deal be paid in cash. NetRatings also has agreed to lend Jupiter up to $25 million under a secured credit facility that Jupiter will use to replace a standby letter of credit that it has with chairman Tod Johnson.

Jupiter Media Metrix in March filed a lawsuit against NetRatings in U.S. District Court in Delaware, alleging the company violated its patent for computer tracking. The lawsuit not only seeks a permanent injunction precluding NetRatings from using the patent, but also monetary damages. NetRatings characterized the lawsuit as "frivolous."